McCain Proposes 401(k) Reform

John McCormack

Seeking new ways to respond to the frightening economic collapse, Sen. John McCain proposed today that retirees should not be required to cash in the stocks from their retirement accounts when they reach 70-and-a-half years old.

Current rules require that liquidation of 401(k) plans begin when seniors reach that age. But with stocks collapsing, those accounts are worth far less than many of their owners expected them to be. Under the current rules, they would have to sell at a huge loss.

"To spare investors from being forced to sell their stocks at just the time when the market is hurting the most, those rules should be suspended," McCain said at a rally here.

The Obama campaign just issued a statement that the Democratic ticket supports this plan as well. Gary Andres noted earlier this week that, according to Gallup, McCain's 8-point lead among seniors in August turned into a 1-point deficit following the financial crisis.